Politics

David Cameron is already irritating European leaders with his refusal to support any real-terms increases in the multi annual EU Budget, but this week, the Prime Minister is going to come under pressure to go even further and force a real-terms cut. This morning, he has Ed Balls and Douglas Alexander breathing down his neck, with a piece in the Times arguing that a cut is ‘difficult but achievable with the right leadership and the right approach from the UK’. In his own party, Liam Fox says it is ‘obscene’ to ‘even increase for inflation the inflated wages of the eurocrats’ and is arguing in a speech today that weaker

Since leaving the Cabinet, Liam Fox has acted as a cross between a scout and an out-rider for various of his former Conservative Cabinet colleagues. In a speech in Oslo tomorrow, he’ll argue that the only way to deal with the Euro crisis is for all of those countries who cannot realistically cope with the demands of the single currency to leave in one go. Otherwise, he argues the markets will simply pick the weaker countries off one by one. Fox is certainly right that if Greece left, or was forced out, of the single currency, Spain and Italy would then find themselves under intense—and, probably intolerable—market pressure. But I

Although sometimes implied in public debates, deficit reduction and growth are not alternatives. Both are essential for Britain’s prosperity and economic stability. On either count, George Osborne is failing. In 2010, George Osborne inherited an economy that was growing at 0.7 per cent. Later that year he ignored the advice of many economists and set out plans to close the deficit within four years rather than eight. He also failed to set out a coherent growth plan, predicated on investment and jobs in the green economy that his party once championed. The result, plain for all to see, has been a double dip recession. The economy has contracted in each

The EU budget negotiation, now a month away, promises to be David Cameron’s next big European test. The Prime Minister has repeatedly declared that he wants to see the EU budget frozen at 2011 levels and that he’s prepared to use the need for unanimity to achieve that. The Economist this week has a very useful scene-setter for the budget talks. It sketches the contours thus: ‘Countries are coalescing around loose (yet often divided) groups. There are the ‘friends of cohesion’: the net recipients of regional spending, such as Poland, Hungary and the Baltic states. And there are the ‘friends of better spending’: the net contributors, such as Germany, France,